Texas oil opened Thursday with a rise of 8.93 percent, to $ 22.19 a barrel. Oil has experienced three days of falls. It took it to its lowest levels in almost two decades as the coronavirus and the conflict between Russia and Saudi Arabia plummeted the demand of the commodity.
The international benchmark Brent barrel has lost half its price in less than two weeks. The oil price sank to $ 24.52 on Wednesday, its lowest since 2003. However, investors in financial markets assessed the impact of massive stimulus measures approved by central banks across the world. Consequently, Brent oil got some respite. It gained $ 1.56, or 6.27%, to $ 26.44 a barrel.
For its part, the West Texas Intermediate (WTI) in the United States rebounds $ 2.55, or 12.52%, to $ 22.92 a barrel, after having lost almost 25% the day before. It has been the highest level of its reduction in 18 years.
Pessimism lives on: Oil could fall to zero
The collapse in demand for the coronavirus been the factor that weighed down the price of oil. Besides, the agreement to cut production between OPEC and a group of allied producers, collapsed this month. An increase in supply amid a fight for market share between Russia and Saudi Arabia also affected the crude costs.
Although green is shining today on crude oil futures, analysts continue to show great pessimism if demand continues to fall and supply increases.
Paul Sankey, director of Mizuho Securities, believes crude could fall to zero dollars because soon it will be more expensive to have it stored than to give it away, especially if inventories continue to rise.
Since storing oil comes with costs, if the pandemic sinks oil consumption, producers could be forced to pay customers to get rid of oil stored in stock. This is an extreme notion, but in any case, with demand falling sharply and the agreement between OPEC and Russia to limit production shattered, excess oil could become an issue of enormous importance, says Adam Vettese, eToro analyst.
Deaths from coronaviruses in Italy outnumber those in China
The number of deaths from the coronavirus in Italy on Thursday exceeded that of China, where the virus appeared.
Deaths from the coronavirus outbreak in Italy increased by 427 in the past 24 hours. It totaled 3,405 since February 21, when the outbreak arose. Deaths in China reached 3,425 since January.
However, Italy has far fewer confirmed cases: 41,035 as of Thursday versus 80,907 in China.
Officials and experts believe the total number of infections is significantly higher in Italy. Sadly, testing is limited to those who receive hospital care.
The country’s large elderly population is particularly vulnerable to the virus. It is also considered a factor in a large number of deaths.